James Murdoch: Is Rupert's son Next to Go?

VIDEO: Embattled News Corp. owner faces tough questions along with deputy, son James.PlayABCNEWS.com
WATCH Rupert Murdoch on Hot Seat: CEO Faces Parliament

The Murdoch dynasty may be coming to an end.

James Murdoch, considered the heir apparent to his father Rupert Murdoch's media empire, may be forced to resign or, worse, could face arrest as News Corp's phone hacking scandal continues to unravel.

"I don't see how he can survive," Howell Raines, former executive editor of The New York Times told ABCNews.com. "Seems to me that the movement both politically and legally is ominous."

As for Rupert Murdoch, Raines said, "I think he's seriously wounded."

Raines resigned from the New York Times in 2003 amid the newspaper's own scandal after a reporter, Jayson Blair, had committed plagiarism and fabricated stories.

Father and son are expected to appear before a committee in the British parliament today to tell what they knew about News of the World employees illegally eavesdropping on the phone messages of celebrities, politicians, royal staffers and, as recently revealed, terror and murder victims.

James Murdoch, chairman and chief executive of News Corp, Europe and Asia, did not directly oversee the British tabloid, but he approved payments to some of the paper's most prominent hacking victims, including 700,000 pounds ($1.1 million) to Professional Footballers' Association chief Gordon Taylor.

"The company paid out-of-court settlements approved by me. I now know that I did not have a complete picture when I did so. This was wrong and is a matter of serious regret," he said.

"I think he's finished, over, toast. He just has no credibility," Michael Wolff, the author of the Rupert Murdoch biography "The Man Who Owns the News," told Bloomberg television. "I think Rupert is as involved in this as James, but James ran this show and was in charge of the management of the scandal. He was in charge of the people who committed these crimes. He is the directly responsible executive."

James Murdoch, 38, had been considered his 80-year-old father's likely successor. It was the son who announced the News of the World's closing two weeks ago, saying the paper's good deeds "have been sullied by behavior that was wrong; indeed, if recent allegations are true, it was inhuman and has no place in our company."

Now it seem questionable whether there's a place for James, his father or any member of the Murdoch family if the multibillion-dollar business that Rupert built is to survive.

"Seems to me that the family is going to have to put forward a new candidate," said Raines, who writes a media column for Conde Nast Portfolio. "If I were in that family I'd think about seeing my future financial prospects very much at stake right now. The value of the company is plunging. If the family has the capability of installing someone they should."

"My overall view is that it is very unlikely that any of senior management including James can survive," Raines said.

Wolff agreed it's time for new blood. "This company has a fine future. There's nothing wrong with the company per se," he said.

But it's clear the company will change going forward, and the closing of News of the World is just the beginning. The entire newspaper division, which the Murdochs built their fortune on but has been seen lately as an expensive indulgence by independent board members, could be at stake.

There's also talk in Britain of doing away with the vertical integration of media ushered in by former Prime Minister Margaret Thatcher 30 years ago, which allowed Murdoch to buy newspapers, production companies and a stake in British Sky Broadcasting.

The U.S., which has launched an FBI investigation, could consider similar moves.

"I think it's the end of an era," Raines said.

He thinks the moneymaking movie and television studios and television networks will exert more influence going forward.

But he said the editorial future of Fox News, the Wall Street Journal and the New York Post, especially during the upcoming presidential election, are "very much in question" given the credibility issues being raised about News Corp in general.

As for Fox News' wily chairman and Rupert Murdoch's close ally, Roger Ailes, Raines said, "Don't rule him out. Ailes is the real survivor. He could come out of this on top."